Moratorium Gone in Words Only Unless Permits Become Available
BATON ROUGE, LA – In response to this week’s announcement by the U.S. Interior Department and the Bureau of Ocean Energy Management in regard to lifting the moratorium on deep water drilling in the Gulf of Mexico, LSU finance professor and nationally renowned economist Joseph Mason said:
“Though the administration’s announced plans to lift its drilling moratorium make for good headlines, they don’t benefit much else. The continued unwillingness by federal regulators to issue permits will only create the same de facto moratorium for deepwater drillers that is currently halting shallow water operations supposedly outside of the realm of the official moratorium.”
“High levels of uncertainty suppress business investment, economic growth, and job creation. A de facto moratorium will only add more confusion for the oil and gas industry to the ‘unusually uncertain’ economic outlook that Bernanke characterized in his July 21, 2010 testimony before Congress.
“Simply shifting from an official moratorium to an unofficial one does nothing to bring back the thousands of jobs already lost to this deleterious policy.
“Though the Obama administration only explicitly targeted deepwater drilling in its May 6th ban, federal regulators have approved just four new shallow water permits since April. Compared to 10 to 15 permits approved monthly during the same period last year, this Beltway backup clearly signals a de facto ban on all offshore exploration.
“Washington’s foot dragging has real world effects as large employers like Seahawk Drilling Inc. and Hercules Offshore have already had to lay off hundreds of workers and reports of small businesses shutting their doors are rampant throughout the South. Recent analysis suggests as many as 20,000 jobs may have been lost to Washington’s knee-jerk response to the BP spill.”
Dr. Mason warned about the economic consequences of de facto bans in his economic analyses of the administration’s energy policies earlier this year:
- July 2010 “The Economic Cost of a Moratorium on Offshore Oil and Gas Exploration to the Gulf Region”
- September 2010 “Regional and National Economic Impact of Repealing the Section 199 Tax Deduction and Dual-capacity Tax Credit for Oil and Gas Producers”
- September 2010“Critique of the Inter-Agency Economic Report ‘Estimating the Economic Effects of the Deepwater Drilling Moratorium on the Gulf Coast Economy’”
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Founded in May, 2008, The American Energy Alliance (“AEA”) is a not-for-profit organization that engages in grassroots public policy advocacy and debate concerning energy and environmental policies. AEA is the advocacy arm of the Institute for Energy Research (IER), a not-for-profit organization – founded in 1989 – that conducts intensive research and analysis on the functions, operations, and government regulation of global energy markets.Article Source: